if you know financing...


6 replies to this topic
  • xrracer36

Posted March 17, 2004 - 04:53 AM

#1

hi all. i need some help...
can somebody on here please explain to me yamaha's 3.9% APR offer :D
(here's a link to it yamaha's financing offer )
i am a business major at college, but haven't had any courses that go in depth about this kind of thing yet, and i need to understand ho this works. :)
if you could explain payments, payment options, deadlines, periods, the "cash back" feature, etc.. and anything else i would need to know that would be great
thanks in advance for any help. :D
:D
racer36

  • alan250f

Posted March 17, 2004 - 04:59 AM

#2

I didn't check those specific terms, but it is crucial to keep in mind that the out-the-door purchase price is just as important as anything. It is an old dealer trick to sell the monthly payment, and obfuscate the actual cost of the item.

  • YamahaSteve

Posted March 17, 2004 - 05:17 AM

#3

Yeah. They are going to give you up to 200 cash back at the time of the purchase (probably depending on the model). The 3.9% interest is your initial interest rate for the first 24 months. Not a bad deal IF you pay off your principal (what you owe them) inside the 24 months. Then after 24 months they switch your intrest rate to 9.9, 13.9, 17.9 or 21.9%. They don't specify what determines what rate you will get after 24 months but it is either going to be based on your credit or your term (the duration of the loan).

That is basically it. So, if you can plan on paying the loan back within 24 months then you can get a pretty good loan from them.

Hope this helps.

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  • R_Little

Posted March 17, 2004 - 06:15 AM

#4

What Yamaha Steve said.

I'm a CPA, Maybe I can give you some insight

Note these finance deals are usually good only if your are sure you can pay the loan according to terms. Typicaly they give you a cheap interest rate and 3.9% isn't all that cheap nowadays. The also give you a very little grace period to make payments and if you are late one day your rate goes up to the max allowed by state law, usually 18-21%
So if you are going to do it then I would suggest that you pay one payment in advance all the time so there is no way they can claim you did not pay on time. more than likely the actual loan is underwritten by a bank not by Yamaha, the the bank doesn't care how mad you get if you fall behind.

Good luck

Lastly, I do not believe that a dirt bike is an "asset" that should be financed. Pay cash and get a better deal or look at a used bike and let someone else pay the depreciation.

  • Hick

Posted March 17, 2004 - 08:30 AM

#5

hi all. i need some help...
can somebody on here please explain to me yamaha's 3.9% APR offer


Looks like a fairly standard Credit Card.

Like R_Little pointed out, if you miss a payment deadline say goodbye to the low rate, just like many credit cards.

If you make another purchase on that card after you buy the bike the second purchase will be at a higher APR (probably 9.99% but they aren't specific on that). As you make payments, they will retire ALL of the low-APR balance FIRST.


Looks like Yamaha is doing a deal w/ "branded" Citigroup or MBNA credit cards to finance bike sales.

So, if you can qualify for the card under the issuer's (not Yamaha) credit guidelines it is as good a way as any to finance the bike. You are locked in at 3.9% for 24 months. It isn't specific on this point, but it sounds like you don't have to retire the debt in that period, just that the 3.9% lasts that period, but there will likely be some minimum payment (I've never bothered to figure how they calculate min. pmts. but it looks like at least a 10 year payout amount on my cards). I'm sure they are hoping you DON'T pay it down in that time period, so they can earn some 9.99% (or higher) interest on what remains. What this post 24 month rate change will amount to depends on your credit rating.

This is all speculation on my part, but it looks just like a credit card deal to me.

Financed over 24 months at 3.9% APR would mean a payment of about $282



Hope this helps.

  • basicblues

Posted March 17, 2004 - 05:28 PM

#6

All of the above comments are excellent advice but don't overlook the first one. Don't even talk financing with a dealer until you agree on the final cost of the bike then proceed with the financing details. Good Luck...

  • dirtstiff

Posted March 17, 2004 - 06:03 PM

#7

Xracer36, I bought a new bike for my son on Yamaha's 3.9% $39.00 Min. Payment per mos./ until 2005 Plan.
Bottom Line for me is that I will pay the bike off in full next month, so all I have incurred is the 3.9% on the initial purchase price. Some earlier comments hit the negatives on the head. This card rewards you with 21% interest if you miss a payment or are late. Really they set you up so there is a natural chance your' payment gets to them late. My card offer won't allow prepayment as was suggested above, you can always double up or pay more, but they expect a payment on or before your' monthly payment date, every month or you default to the high interest trap.
My advice to you if you can't pay cash; look for financing once you haggle on a final price,try your' bank - savings & loan, or even Honda. The Honda offer locks you into a rate paid out over a term. You may not get the immediate gimmicks, but what you get is a loan at a guarenteed rate, less games.




 
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